Exam 7: Consumers, Producers, and the Efficiency of Markets

Table 7-15 -Refer to Table 7-15. You and your best friend want to hire a professional photographer to take pictures of your two families. The table shows the costs of the four potential sellers in the local photography market. You and your friend agree to offer $500 for each session. Who accepts the offer, and what is the total producer surplus in the market?

Table 7-5 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only three oranges can be supplied per day. -Refer to Table 7-5. If the market price of an orange increases from $0.70 to $1.40, then consumer surplus

All else equal, an increase in demand will cause an increase in producer surplus.

Which of the following will cause a decrease in producer surplus?

Steak and chicken are substitutes. A sharp reduction in the supply of steak would

Consumer surplus is a good measure of economic welfare if policymakers want to

Consumer surplus measures the benefit to buyers of participating in a market.

Figure 7-31 -Refer to Figure 7-31. If the market equilibrium price is $25, how much is total producer surplus in this market?

Efficiency in a market is achieved when

Scenario 7-2 Suppose market demand and market supply are given by the equations: -Refer to Scenario 7-2. Suppose a reduction in input prices shifts the market supply curve to By how much does total consumer surplus increase for those consumers who were already willing to purchase the good with the original supply curve?

The willingness to pay is the maximum amount that a buyer will pay for a good and measures how much the buyer values the good.

Billie Jo values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $425. Billie Jo's willingness to pay for the dishwasher is

Figure 7-11 -Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D', what is the change in producer surplus?

Denise values a stainless steel dishwasher for her new house at $500, but she succeeds in buying one for $350. Denise's consumer surplus is

Economists generally believe that, although there may be advantages to society from ticket-scalping, the costs to society of this activity outweigh the benefits.

Figure 7-23 -Refer to Figure 7-23. If the price were P1, producer surplus would be represented by the area

Scenario 7-1 Suppose market demand is given by the equation -Refer to Scenario 7-1. If the market equilibrium price is $10, how much is total consumer surplus in this market?

Suppose you sell a kayak for $600, but you were willing to sell it for $450. The buyer was willing to pay $650. The total surplus is $200.

Table 7-11 The following table represents the costs of five possible sellers. -Refer to Table 7-11. Who is a marginal seller when the price is $1,100?

If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is $10.